Explain how many bagels should the store manager expect, Operation Management

Assignment Help:

(CPG Bagels) CPG Bagels starts the day with a large production run of bagels. Throughout the morning, additional bagels are produced as needed. The last bake is completed at 3 pm and the store closes at 8 pm. It costs approximately $0.20 in materials and labour to make a bagel. The price of a fresh bagel is $0.60. Bagels not sold by the end of the day are sold the next day as 'day old' bagels in bags of 6, for $0.99 a bag. About two-thirds of the day-old bagels are sold; the remainder are just thrown away. There are many bagel flavours, but for simplicity, concentrate just on the plain bagels. The store manager predicts that demand for plain bagels from 3 pm. Until closing is normally distributed with mean of 54 and standard deviation of 21.

a. How many bagels should the store have at 3 pm to maximize the store's expected profit (from sales between 3 pm until closing)? (Hint: assume day-old bagels are sold for $0.99/6= $0.165 each. don't worry about the fact that day-old bagels are sold in bags of six.)

b. Suppose that the store manager is concerned that stock outs might cause a loss of future business. To explore this idea, the store manager feels that is is appropriate to assign a stock out cost of $5 per bagel that is demanded but not filled. (Customers frequently purchase more than one bagel at a time. This cost is per bagel demanded that is not satisfied rather than per customer that does not receive a complete order.) Given the additional stock out cost, how many bagels should the store have at 3 pm to maximize the store's profit?

c. Suppose the store manager has 101 bagels at 3 pm. How many bagels should the store manager expect to have at the end of the day?


Related Discussions:- Explain how many bagels should the store manager expect

Explain shipment to foreign markets, A U.S. manufacturer that exports goods...

A U.S. manufacturer that exports goods made at its U.S. plants for shipment to foreign markets

Explain description of the crime, Find a news article with homicide Provide...

Find a news article with homicide Provide a brief description of the crime. What does the crime data suggest about this type of crime? Does the article discuss the motive for the c

Explain decision making and control processes, 1. From an international cul...

1. From an international cultural perspective, how much of an impact is on the timely decision making and control processes can there be when there is a difference in national and

Explain facilitating goods packaging cost, One of the package of features t...

One of the package of features that make up a service are: Appearance Facilitating goods Packaging Cost Implied use

Explain tables of data that firedup will need, FiredUp, Inc is a small busi...

FiredUp, Inc is a small business owned by Curt and Julie Robards.Based in Brisbane, Australia, FiredUp manufactures and sellsFiredUp, a light-weight camping stove. Recall that Curt

Calculate the normal time for the job, A work  sampling  study  is to  b...

A work  sampling  study  is to  be made of a typist  pool. It is  left that  typists are idle  30 % of the  time. How many observations  should  be made  in order  to  have 395.5%

Describe who are the stakeholders in this case, YP11-6 Giant Airlines opera...

YP11-6 Giant Airlines operates out of three main "hub" airports in the United States. Recently Mosquito Airlines began operating a flight from Reno, Nevada, into Giant's Metropolis

Determine that the trade offs of operation system is correct, Determine tha...

Determine that the Trade offs of operations systems is correct You may wish to ponder this trade-offs for a moment and ask the question: is this correct? Consider an organisat

Explain district investigation of sexual harassment case, Peter Lewiston wa...

Peter Lewiston was terminated on July 15, 2004, by the governing board of the Pine Circle Unified School District (PCUSD) for violation of the district sexual harassment policy. Pr

Explain what are the coordinates of the central location, A small rural cou...

A small rural county has experienced unprecedented growth over the past 6 years, and as a result, the local school district built the new 500-student North Park Elementary School.

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd